Tire 1 capital in banking system rose 22.8%

The tire 1 capital in the banking system, which shows the banks’ capacity to preserve solvency in difficult financial conditions, increased by 22.8% over the first nine months of this year, to 6,421.1 billion lei, Info-Prim Neo reports, quoting a communiqué from the National Bank of Moldova (NBM). Foreign investment made up 73.1% of the banks’ capital, up 1.2 percentage points from January. According to the central bank, the average risk weighted capital adequacy ratio in the system remained at a high level – 30.8% (the minimum required level is 12%) and shows that the banks can perform risky operations without endangering their financial situation. This shows that the vulnerability level is low. On September 30, 2008, the assets totaled 39.356,2 billion lei, an increase of 23% compared with the start of the year. All the components of the assets have increased, pointing to a diverse development of the banking activity. The net volume of loans rose by 20.2% to 23.897,3 billion lei, the net loans owed by the banks and the NBM - by 46.5% to 8.944,7 billion lei, the volume of cash – by 5.6% to 1.777 billion lei, etc. The risks in lending activity were administered according to the development priorities of the national economy. The volume of realty, construction and development loans has grown, pushing these loans to the second position. The loans offered to industry and trade made up 48%, for realty, construction and development – 14.5%, to agriculture and food industry – 13.6%, for consumption – 13.3%. The balance of loans granted to companies working in trade on September 30 was 7.243,2 billion lei, up 16.9% from January. The balance of loans offered to small and medium-sized enterprises was 8.957,6 billion lei, an increase of 17.8% compared with December 31, 2007. The nine-month net profit in the banking system was 1,080.5 billion lei, up 31.9% from January. The return on assets on September 30 was 4%, up 0.1 percentage points from January. The long-term liquidity in the banking system (assets for more than two years/financial resources with a possible withdrawing term of over two years) was 0.6. The current liquidity in the system (liquid assets in cash equivalent, deposits at the NBM, state securities, interbank loans for up to one month /total assets) was 31.4%. Banks’ liabilities totaled 32.598,6 billion lei, an increase of 23.2% compared with January and of 8% compared with the previous quarter, showing that the banking system continues to be reliable and is a better financial intermediary, the communiqué says.